2014 FULL YEAR AND FOURTH QUARTER RESULTS
PROFITABLE GROWTH IN TOUGHER MARKETS
Full year highlights
Underlying sales growth up 2.9%, ahead of our markets, with volume 1.0% and price 1.9%
Turnover declined (2.7)% to €48.4 billion including a negative currency impact of (4.6)%
Core operating margin up 40bps at current exchange rates
Free cash flow of €3.1 billion after €0.8 billion of tax on disposal profits
Core earnings per share up 11% at constant exchange rates, up 2% at current exchange rates to €1.61
Fourth quarter highlights
Underlying sales growth up 2.1% with volume (0.4)% and price 2.5%
Turnover increased 2.4% including a positive currency impact of 1.6% and net acquisitions & disposals (1.3)%
Paul Polman: Chief Executive Officer statement
“Despite a challenging year for our industry with significant economic headwinds and weak markets we have delivered
another year of competitive underlying sales growth and margin expansion. This consistency, now established over
the last six years, has been achieved during a period of high volatility as we have built a more resilient company.
We have increasingly focussed on our core business and have sharpened the strategy across each of our four
categories. In today’s low growth environment we are driving efficiency and simplification initiatives to make the
organisation more agile and more capable of responding to the unexpected. We have continued to remove cost and to
streamline processes to provide fuel for growth. Our innovation programmes have further accelerated and we have
exported our iconic brands into new markets. We have continued to use acquisitions and disposals to strengthen the
portfolio.
The Unilever Sustainable Living Plan continues to underpin all aspects of our business model from the way we source
materials through to our product innovations. Our activities enhance our reputation and corporate brand. They are
well-recognised and an important way of reducing cost and risk in increasingly well-informed and challenging
societies.
We do not plan on a significant improvement in market conditions in 2015. Against this background, we expect our full
year performance to be similar to 2014 with the first quarter being softer but growth improving during the year. We
remain focussed on competitive, profitable, consistent and responsible growth.”
Key Financials (unaudited)
Current Rates Full Year 2014
Underlying Sales Growth (*) 2.9%
Turnover €48.4bn -2.7%
Operating Profit €8.0bn +6%
Net Profit €5.5bn +5%
Core earnings per share (*) €1.61 +2%
Diluted earnings per share €1.79 +8%
Quarterly dividend payable in March 2015 €0.285 per share
(*) Underlying sales growth and core earnings per share are non-GAAP measures (see pages 5 and 6). 20 January 2015
2
FULL YEAR OPERATIONAL REVIEW: CATEGORIES
Fourth Quarter 2014 Full Year 2014
(unaudited) Turnover USG UVG UPG Turnover USG UVG UPG
Change in core
operating
margin
€bn % % % €bn % % % bps
Unilever Total 12.1 2.1 (0.4) 2.5 48.4 2.9 1.0 1.9 40
Personal Care 4.7 2.1 (0.9) 3.1 17.7 3.5 1.2 2.3 90
Foods 3.3 (0.7) (1.7) 1.0 12.4 (0.6) (1.1) 0.6 90
Refreshment 1.7 5.3 3.1 2.1 9.2 3.8 2.0 1.8 (30)
Home Care 2.3 4.0 0.1 3.9 9.2 5.8 2.4 3.4 (10)
Our markets: Growth was weak in emerging markets as economic pressures impacted consumer demand. Developed
markets were flat, with a modest pick-up in North America partly offsetting market contraction in Europe. Globally,
our markets grew by around 2.5% with flat volumes.
Unilever overall performance: In 2014 we grew ahead of our markets, both in volume and value. With weaker
consumer demand, underlying sales growth in emerging markets slowed to 5.7% whilst developed markets declined
by (0.8)%. Home Care, Personal Care and Refreshment all grew but Foods was adversely impacted by spreads.
In the fourth quarter underlying sales grew 2.1% with a higher contribution from price but volumes remained weak.
As expected, the trade de-stocking in China continued and led to a sales decline of around 20%. This particularly
impacted Personal Care and Home Care. In many regions, competitive intensity remains high in all categories, and
notably in Personal Care and Home Care.
For the full year core operating margin improved 40bps to 14.5% at current exchange rates. Gross margin declined by
20bps to 41.4%. This was largely driven by currency related cost increases in emerging markets, partly offset by
pricing, savings and mix such as margin-accretive innovation. Significant efficiencies in the cost of producing
advertising allowed us to increase our share of spend whilst maintaining brand and marketing investment at 14.8%.
Overheads were reduced by 60bps, benefiting from stepped up savings efforts behind project Half.
Personal Care
Personal Care grew ahead of weaker markets helped by a strong set of new product launches. Deodorants benefited
from the success of the compressed aerosol range in Europe, continued growth from Dove innovations and most
recently from the cross-brand launch of dry sprays in North America. Skin cleansing growth was driven by strong
performances from Lifebuoy and the improved Dove Nutrium Moisture body wash. The launch of Baby Dove in Brazil
has been well received by consumers. In December we announced the acquisition of the Camay and Zest brands
which will strengthen our portfolio in emerging markets, particularly in Mexico.
In hair, the Dove Advanced Hair series successfully established the premium Oxygen Moisture range in North America
and this has now been extended to Europe. Hair growth was also underpinned by strong performances from Sunsilk
Naturals in Asia, the TRESemmé 7 Day Keratin Smooth range and the successful introduction of Clear in Japan.
Full year core operating margin was up 90bps driven by reduced overheads and also helped by brand and marketing
efficiencies.
Foods
Savoury and dressings both grew but spreads declined due to lower consumer demand for margarine in Europe and
North America. Savoury growth was backed by successful market development campaigns for cooking ingredients in
emerging markets. In India and Pakistan, Knorr built further scale driven by good performances in stock cubes, soups
and noodles. Indonesia saw strong growth of Royco and Bango, both of which are well adapted to meet local needs.
Dressings continued to grow helped by the launch of Hellmann’s in the Netherlands and Portugal.
In spreads we launched blends of vegetable oil and butter such as Gold from Flora. We gained market share in
margarine but this was insufficient to offset the decline of the category which also saw price deflation in a benign
commodity cost environment. In the fourth quarter we announced our intention to set up a separate business unit for
the European and North American spreads business. This will be fully operational by the middle of this year. We
continued the pruning of our Foods portfolio in 2014 with a number of disposals, including Ragu and Bertolli pasta
sauces in North America and the meat snacks business under the Bifi and Peperami brands in Europe.
Full year core operating margin was up 90bps supported by increased gross margins and lower overheads partially
offset by higher brand and marketing investments.
3
Refreshment
Good growth in ice cream was driven by a strong innovation programme. The United States returned to growth and
gained market leadership with good contributions from Ben & Jerry’s Cores and Breyer’s Gelato. This will be
enhanced with the recent acquisition of Talenti gelatos and sorbettos. Magnum celebrated its 25th anniversary with
activities that reinforced the chocolate credentials of the brand.
Leaf tea grew although performance was mixed. We saw growth in the United States driven by the success of Lipton
K-Cups® and new liquid concentrate but weaker sales in Russia and Poland. In the United Kingdom we launched a
range of fruit and green teas under the PG Tips brand to target this growing segment.
Full year core operating margin was down 30bps with lower gross margins impacted by higher dairy and chocolate
costs, not fully recovered by pricing and savings.
Home Care
Laundry had another year of broad-based growth, driven by sustained investment in innovation, market development
and white spaces expansion. We have successfully extended the Omo brand into Saudi Arabia and the Gulf, and we
have launched a range of Omo stain removers and pre-treaters in Brazil. Fabric conditioners grew well through
super-sensorial variants like Comfort Aromatherapy in South East Asia and Latin America.
Household cleaning growth continued to outpace the market. Cif, Domestos and Sunlight delivered strong growth and
innovations such as Sunlight Nature landed well in South East Asia. The expansion into new geographies and formats
continued in 2014 as we launched Domestos in several countries in Africa.
Full year core operating margin was down 10bps as gross margins were impacted by cost increases from weaker
currencies in emerging markets which were not fully offset by pricing and savings. Strong margin improvement in the
second half, as we roll out low cost business models, was helped by gains on property sales in India.
FULL YEAR OPERATIONAL REVIEW: GEOGRAPHICAL AREA
Fourth Quarter 2014 Full Year 2014
(unaudited) Turnover USG UVG UPG Turnover USG UVG UPG
Change in core
operating
margin
€bn % % % €bn % % % bps
Unilever Total 12.1 2.1 (0.4) 2.5 48.4 2.9 1.0 1.9 40
Asia/AMET/RUB 4.9 2.1 0.1 2.1 19.7 4.3 2.0 2.3 -
The Americas 4.1 6.2 - 6.3 15.5 5.4 0.7 4.7 40
Europe 3.1 (3.1) (1.5) (1.6) 13.2 (2.1) (0.2) (1.8) 130
Asia/AMET/RUB
Growth was mixed across countries. Indonesia, India, Turkey and the Philippines delivered a year of double-digit
growth, supported by extending the distribution of our products. However overall growth was held back by softer
markets and a high level of competitive intensity. As a result growth in Africa and countries such as China and
Thailand was below historical run rates.
Full year core operating margin was flat as lower overheads primarily offset an adverse gross margin movement that
was impacted by cost increases from weaker currencies.
The Americas
Latin America delivered double-digit underlying sales growth underpinned by strong pricing but also modest volume
growth. We grew ahead of our markets, which faced substantial currency devaluation and high inflation. In North
America economic conditions improved through the year but the promotional environment remained intense. We
returned to growth, driven by ice cream and deodorants, helped by a new range of aerosols towards the end of the
year.
Full year core operating margin was up 40bps primarily driven by lower overheads only partially offset by lower gross
margins in a challenging commodity cost and currency environment.
Europe
Our markets in Europe remained challenging with high competitive intensity in many countries and continued price
deflation. This led to a decline in prices which is broad-based across countries and categories. Laundry grew well
ahead of our market with strong volume growth, but spreads weighed on our overall performance.
Europe continued to be a strong contributor to Unilever’s margin accretion. Full year core operating margin was up
130bps driven by higher gross margin and lower overheads which reflect savings from the extensive restructuring and
simplification programmes of recent years.
4
ADDITIONAL COMMENTARY ON THE FINANCIAL STATEMENTS – FULL YEAR
Finance costs and tax
The cost of financing net borrowings in 2014 was €383 million versus €397 million in 2013. The average interest rate
on borrowings was 3.5% and the average return on cash deposits was 3.8%. Pensions financing was a charge of €94
million versus a charge of €133 million in the prior year.
The effective tax rate was 28.2%, higher than 26.4% in 2013 mainly due to the tax impact of business disposals. The tax
rate on core earnings was 25.9%, in line with our longer term expectation of around 26%.
Joint ventures, associates and other income from non-current investments
Net profit from joint ventures and associates, together with other income from non-current investments, contributed
€143 million versus €127 million in 2013.
Earnings per share
Core earnings per share increased by 2% to €1.61 for the full year, despite an adverse currency impact of (9)%. At
constant exchange rates, core earnings per share increased by 11%, driven by higher revenue, improved core
operating margin, the increased shareholding in non-controlling interests and the impact from purchasing the Estate
shares left in trust by the first Viscount Leverhulme which was announced in May 2014. This measure excludes the
impact of business disposals, acquisition and disposal related costs, impairments and other one-off items.
Fully diluted earnings per share for the full year was up 8% at €1.79.
Pensions
Whilst we made a cash contribution of €652 million to pensions, the net pension deficit increased to €3.6 billion at the
end of December 2014 versus €2.0 billion as at 31 December 2013. The increase primarily reflects the impact of
higher liabilities due to lower discount rates.
Disposals
Business disposals contributed €1,392 million to non-core profits versus €733 million for the full year 2013. This
primarily related to the disposal of the Ragu and Bertolli pasta sauces and the Bifi / Pepperami brands. We sold the
Slim.Fast business and recognised an impairment charge of €305 million on the related assets within non-core items.
Acquisitions and disposal related costs amounted to €97 million against €112 million in 2013.
Free cash flow
We had another strong year of cash delivery similar to 2013 despite currency headwinds. Free cash flow was €3.1
billion in 2014. This measure excludes the cash proceeds from disposals but includes tax on disposal profits which
was €0.8 billion. Adjusting for that, free cash flow would be €3.9 billion. Year-end working capital and net capital
expenditure were in line with the prior year.
Net debt
Closing net debt was €9.9 billion versus €8.5 billion as at 31 December 2013. The increase included the €0.9 billion
cash outflow for purchasing the Leverhulme Estate shares mentioned above.
Finance and liquidity
During the year the following bonds matured and were repaid: (i) US $750 million 3.65%, (ii) Renminbi 300 million
1.15%, and (iii) £350 million 4.00%.
On 20 February 2014, we issued Renminbi 300 million 2.95% fixed rate notes due February 2017. On 19 March 2014 we
issued our first green sustainability bond. The £250 million 2% fixed rate notes are due 19 December 2018. The
proceeds were deployed on projects supporting the goals of the Unilever Sustainable Living Plan.
COMPETITION INVESTIGATIONS
As previously disclosed, along with other consumer products companies and retail customers, Unilever is involved in
a number of ongoing investigations by national competition authorities. These proceedings and investigations are at
various stages and concern a variety of product markets. In the second half of 2013 Unilever recognised provisions of
€120 million related to these cases, disclosed within non-core items. In the second half of 2014 these provisions were
increased by a further €30 million.
Ongoing compliance with competition laws is of key importance to Unilever. It is Unilever’s policy to co-operate fully
with competition authorities whenever questions or issues arise. In addition the Group continues to reinforce and
enhance its internal competition law compliance programme on an ongoing basis.
5
NON-GAAP MEASURES
In our financial reporting we use certain measures that are not recognised under IFRS or other generally accepted
accounting principles (GAAP). We do this because we believe that these measures are useful to investors and other
users of our financial statements in helping them to understand underlying business performance. Wherever we use
such measures, we make clear that these are not intended as a substitute for recognised GAAP measures. Wherever
appropriate and practical, we provide reconciliations to relevant GAAP measures. Unilever uses ‘constant rate’
‘underlying’ and ‘core’ measures primarily for internal performance analysis and targeting purposes. The non-GAAP
measures which we apply in our reporting are set out below.
Underlying sales growth (USG)
Underlying Sales Growth or “USG” refers to the increase in turnover for the period, excluding any change in turnover
resulting from acquisitions, disposals and changes in currency. The impact of acquisitions and disposals is excluded
from USG for a period of 12 calendar months from the applicable closing date. Turnover from acquired brands that
are launched in countries where they were not previously sold is included in USG as such turnover is more
attributable to our existing sales and distribution network than the acquisition itself. The reconciliation of USG to
changes in the GAAP measure turnover is provided in notes 3 and 4.
Underlying volume growth (UVG)
“Underlying Volume Growth” or “UVG” is part of USG and means, for the applicable period, the increase in turnover in
such period calculated as the sum of (1) the increase in turnover attributable to the volume of products sold; and (2)
the increase in turnover attributable to the composition of products sold during such period. UVG therefore excludes
any impact to USG due to changes in prices. The relationship between the two measures is set out in notes 3 and 4.
Free cash flow (FCF)
Within the Unilever Group, free cash flow (FCF) is defined as cash flow from operating activities, less income taxes
paid, net capital expenditures and net interest payments and preference dividends paid. It does not represent residual
cash flows entirely available for discretionary purposes; for example, the repayment of principal amounts borrowed is
not deducted from FCF. Free cash flow reflects an additional way of viewing our liquidity that we believe is useful to
investors because it represents cash flows that could be used for distribution of dividends, repayment of debt or to
fund our strategic initiatives, including acquisitions, if any.
The reconciliation of FCF to net profit is as follows:
€ million Full Year
(unaudited) 2014 2013
Net profit 5,515 5,263
Taxation 2,131 1,851
Share of net profit of joint ventures/associates and other income
from non-current investments (143) (127)
Net finance costs 477 530
Operating profit 7,980 7,517
Depreciation, amortisation and impairment 1,432 1,151
Changes in working capital 8 200
Pensions and similar obligations less payments (364) (383)
Provisions less payments 32 126
Elimination of (profits)/losses on disposals (1,460) (725)
Non-cash charge for share-based compensation 188 228
Other adjustments 38 (15)
Cash flow from operating activities 7,854 8,099
Income tax paid (2,311) (1,805)
Net capital expenditure (2,045) (2,027)
Net interest and preference dividends paid (398) (411)
Free cash flow 3,100 3,856
Net cash flow (used in)/from investing activities (341) (1,161)
Net cash flow (used in)/from financing activities (5,190) (5,390)
6
NON-GAAP MEASURES (continued)
Core operating profit (COP), core operating margin (COM) and non-core items
COP and COM means operating profit and operating margin, respectively, before the impact of business disposals,
acquisition and disposal related costs, impairments and other one-off items, which we collectively term non-core
items, due to their nature and frequency of occurrence. The reconciliation of core operating profit to operating profit is
as follows:
€ million Full Year
(unaudited) 2014 2013
Operating profit 7,980 7,517
Non-core items (see note 2) (960) (501)
Core operating profit 7,020 7,016
Turnover 48,436 49,797
Operating margin (%) 16.5 15.1
Core operating margin (%) 14.5 14.1
Core EPS
The Group also refers to core earnings per share (core EPS). In calculating core earnings, net profit attributable to
shareholders’ equity is adjusted to eliminate the post tax impact of non-core items. Refer to note 2 on page 12 for
reconciliation of core earnings to net profit attributable to shareholders’ equity.
Net debt
Net debt is defined as the excess of total financial liabilities, excluding trade payables and other current liabilities,
over cash, cash equivalents and other current financial assets, excluding trade and other current receivables. It is a
measure that provides valuable additional information on the summary presentation of the Group’s net financial
liabilities and is a measure in common use elsewhere.
The reconciliation of net debt to the GAAP measure total financial liabilities is as follows:
€ million As at
31 December
2014
As at
31 December
2013 (unaudited)
Total financial liabilities (12,722) (11,501)
Current financial liabilities (5,536) (4,010)
Non-current financial liabilities (7,186) (7,491)
Cash and cash equivalents as per balance sheet 2,151 2,285
Cash and cash equivalents as per cash flow statement 1,910 2,044
Add bank overdrafts deducted therein 241 241
Other current financial assets 671 760
Net debt (9,900) (8,456)
7
CAUTIONARY STATEMENT
This announcement may contain forward-looking statements, including ‘forward-looking statements’ within the
meaning of the United States Private Securities Litigation Reform Act of 1995. Words such as ‘will’, ‘aim’, ‘expects’,
‘anticipates’, ‘intends’, ‘looks’, ‘believes’, ‘vision’, or the negative of these terms and other similar expressions of
future performance or results, and their negatives, are intended to identify such forward-looking statements. These
forward-looking statements are based upon current expectations and assumptions regarding anticipated
developments and other factors affecting the Unilever group (the “Group”). They are not historical facts, nor are they
guarantees of future performance.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could
cause actual results to differ materially from those expressed or implied by these forward-looking statements.
Among other risks and uncertainties, the material or principal factors which could cause actual results to differ
materially are: Unilever’s global brands not meeting consumer preferences; Unilever’s ability to innovate and remain
competitive; Unilever’s investment choices in its portfolio management; inability to find sustainable solutions to
support long-term growth; customer relationships; the recruitment and retention of talented employees; disruptions
in our supply chain; the cost of raw materials and commodities; the production of safe and high quality products;
secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business transformation
projects; economic and political risks and natural disasters; financial risks; failure to meet high ethical standards; and
managing regulatory, tax and legal matters. Further details of potential risks and uncertainties affecting the Group
are described in the Group’s filings with the London Stock Exchange, NYSE Euronext in Amsterdam and the US
Securities and Exchange Commission, including the Group’s Annual Report on Form 20-F for the year ended 31
December 2013 and Annual Report and Accounts 2013. These forward-looking statements speak only as of the date of
this announcement. Except as required by any applicable law or regulation, the Group expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
ENQUIRIES
Media: Media Relations Team Investors: Investor Relations Team
UK +44 7917 271 819
or +44 20 7822 5052
NL +31 6 1137 5464
+44 20 7822 6830
There will be a web cast of the results presentation available at:
www.unilever.com/ourcompany/investorcentre/results/quarterlyresults/default.asp
The web cast can also be viewed from the Unilever Investor Relations app which you can download from:
http://itunes.apple.com/us/app/unilever-investor-centre-app/id483403509?mt=8&ign-mpt=uo%3D4
8
INCOME STATEMENT
(unaudited)
€ million Full Year
2014 2013
Increase/
(Decrease)
Current
rates
Constant
rates
Turnover 48,436 49,797 (2.7)% 2.0%
Operating profit 7,980 7,517 6% 13%
After (charging)/crediting non-core items 960 501
Net finance costs (477) (530)
Finance income 117 103
Finance costs (500) (500)
Pensions and similar obligations (94) (133)
Share of net profit/(loss) of joint ventures and associates 98 113
Other income/(loss) from non-current investments 45 14
Profit before taxation 7,646 7,114 7% 15%
Taxation (2,131) (1,851)
Net profit
5,515 5,263 5% 13%
Attributable to:
Non-controlling interests 344 421
Shareholders’ equity 5,171 4,842 7% 15%
Combined earnings per share
Basic earnings per share (euros) 1.82 1.71 7% 15%
Diluted earnings per share (euros) 1.79 1.66 8% 17%
STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
€ million Full Year
2014 2013
Net profit 5,515 5,263
Other comprehensive income
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit pension plans net of tax (1,250) 697
Items that may be reclassified subsequently to profit or loss:
Currency retranslation gains/(losses) net of tax
Fair value gains/(losses) on financial instruments net of tax
(25)
(85)
(999)
106
Total comprehensive income 4,155 5,067
Attributable to:
Non-controlling interests 404 339
Shareholders’ equity 3,751 4,728
9
STATEMENT OF CHANGES IN EQUITY
(unaudited)
€ million Called up
share
capital
Share
premium
account
Other
reserves
Retained
profit
Total Non-
controlling
interest
Total
equity
1 January 2013 484 140 (6,196) 20,964 15,392 557 15,949
Profit or loss for the year - - - 4,842 4,842 421 5,263
Other comprehensive income net
of tax
Fair value gains/(losses) on
financial instruments - - 106 - 106 - 106
Remeasurements of defined
benefit pension plans net of
tax - - - 697 697 - 697
Currency retranslation
gains/(losses) - - (788) (129) (917) (82) (999)
Total comprehensive income - - (682) 5,410 4,728 339 5,067
Dividends on ordinary capital - - - (2,981) (2,981) - (2,981)
Movements in treasury stock(a) - - 112 (83) 29 - 29
Share-based payment credit(b) - - - 242 242 - 242
Dividends paid to non-controlling
interests - - - - - (307) (307)
Currency retranslation
gains/(losses) net of tax - (5) - - (5) (5) (10)
Other movements in equity(c) - 3 20 (3,084) (3,061) (113) (3,174)
31 December 2013 484 138 (6,746) 20,468 14,344 471 14,815
Profit or loss for the year - - - 5,171 5,171 344 5,515
Other comprehensive income net
of tax
Fair value gains/(losses) on
financial instruments - - (85) - (85) - (85)
Remeasurements of defined
benefit pension plans net of
tax - - - (1,253) (1,253) 3 (1,250)
Currency retranslation
gains/(losses) - - (290) 208 (82) 57 (25)
Total comprehensive income - - (375) 4,126 3,751 404 4,155
Dividends on ordinary capital - - - (3,196) (3,196) - (3,196)
Movements in treasury stock(a) - - (235) (217) (452) - (452)
Share-based payment credit(b) - - - 188 188 - 188
Dividends paid to non-controlling
interests - - - - - (342) (342)
Currency retranslation
gains/(losses) net of tax - 7 - - 7 (2) 5
Other movements in equity(c) - - (182) (809) (991) 81 (910)
31 December 2014 484 145 (7,538) 20,560 13,651 612 14,263
(a) Includes purchases and sales of treasury stock, and transfer from treasury stock to retained profit of share-settled schemes
arising from prior years and differences between exercise and grant price of share options. (b) The share-based payment credit relates to the non-cash charge recorded against operating profit in respect of the fair value of
share options and awards granted to employees. (c) 2014 includes the impact of the purchase of Estate shares (see note 10). 2013 includes the impact of the acquisition of non-
controlling interests.
10
BALANCE SHEET
(unaudited)
€ million As at
31 December
2014
As at
31 December
2013
Non-current assets
Goodwill 14,642 13,917
Intangible assets 7,532 6,987
Property, plant and equipment 10,472 9,344
Pension asset for funded schemes in surplus 376 991
Deferred tax assets 1,286 1,084
Financial assets 715 505
Other non-current assets 657 563
35,680 33,391
Current assets
Inventories 4,168 3,937
Trade and other current receivables 5,029 4,831
Current tax assets 281 217
Cash and cash equivalents 2,151 2,285
Other financial assets 671 760
Non-current assets held for sale 47 92
12,347 12,122
Total assets 48,027 45,513
Current liabilities
Financial liabilities 5,536 4,010
Trade payables and other current liabilities 12,606 11,735
Current tax liabilities 1,081 1,254
Provisions 418 379
Liabilities associated with assets held for sale 1 4
19,642 17,382
Non-current liabilities
Financial liabilities 7,186 7,491
Non-current tax liabilities 161 145
Pensions and post-retirement healthcare liabilities:
Funded schemes in deficit 2,222 1,405
Unfunded schemes 1,725 1,563
Provisions 916 892
Deferred tax liabilities 1,534 1,524
Other non-current liabilities 378 296
14,122 13,316
Total liabilities 33,764 30,698
Equity
Shareholders’ equity 13,651 14,344
Non-controlling interests 612 471
Total equity 14,263 14,815
Total liabilities and equity 48,027 45,513
11
CASH FLOW STATEMENT
(unaudited)
€ million Full Year
2014 2013
Net profit 5,515 5,263
Taxation 2,131 1,851
Share of net profit of joint ventures/associates and other income
from non-current investments (143) (127)
Net finance costs 477 530
Operating profit 7,980 7,517
Depreciation, amortisation and impairment 1,432 1,151
Changes in working capital 8 200
Pensions and similar obligations less payments (364) (383)
Provisions less payments 32 126
Elimination of (profits)/losses on disposals (1,460) (725)
Non-cash charge for share-based compensation 188 228
Other adjustments 38 (15)
Cash flow from operating activities 7,854 8,099
Income tax paid (2,311) (1,805)
Net cash flow from operating activities 5,543 6,294
Interest received 123 100
Net capital expenditure (2,045) (2,027)
Other acquisitions and disposals 1,428 911
Other investing activities 153 (145)
Net cash flow (used in)/from investing activities (341) (1,161)
Dividends paid on ordinary share capital (3,189) (2,993)
Interest and preference dividends paid (521) (511)
Acquisition of non-controlling interest(a) - (2,901)
Change in financial liabilities 191 1,264
Purchase of Estate shares (see note 10) (880) -
Other movements on treasury stock (467) 24
Other financing activities (324) (273)
Net cash flow (used in)/from financing activities (5,190) (5,390)
Net increase/(decrease) in cash and cash equivalents 12 (257)
Cash and cash equivalents at the beginning of the period 2,044 2,217
Effect of foreign exchange rate changes (146) 84
Cash and cash equivalents at the end of the period 1,910 2,044
(a) Acquisition of non-controlling interests in 2013 includes various transactions to acquire non-controlling interests, primarily an
outflow of €2,515 million to increase the Group’s ownership of Hindustan Unilever Limited from 52% to 67%.
12
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
1 ACCOUNTING INFORMATION AND POLICIES
Except as set out below the accounting policies and methods of computation are consistent with the year ended 31 December 2013.
The condensed preliminary financial statements are based on International Financial Reporting Standards (IFRS) as adopted by the
EU and IFRS as issued by the International Accounting Standards Board.
With effect from 1 January 2014 we have implemented amendments to IAS 32 ‘Financial instruments: Presentation’ and IAS 39
‘Financial instruments: Recognition and Measurement’. The impact on the Group is not material.
The condensed financial statements are shown at current exchange rates, while percentage year-on-year changes are shown at
both current and constant exchange rates to facilitate comparison. The income statement on page 8, the statement of
comprehensive income on page 8, the statement of changes in equity on page 9 and the cash flow statement on page 11 are
translated at exchange rates current in each period. The balance sheet on page 10 is translated at period-end rates of exchange.
The condensed financial statements attached do not constitute the full financial statements within the meaning of Section 434 of
the UK Companies Act 2006. Full accounts for Unilever for the year ended 31 December 2013 have been delivered to the Registrar
of Companies. The auditors’ reports on these accounts were unqualified and did not contain a statement under Section 498 (2) or
Section 498 (3) of the UK Companies Act 2006.
2 SIGNIFICANT ITEMS WITHIN THE INCOME STATEMENT
In our income statement reporting, we disclose the total value of non-core items that arise within operating profit. These are costs
and revenues relating to business disposals, acquisition and disposal related costs, impairments and other one-off items, which we
collectively term non-core items, due to their nature and frequency of occurrence.
€ million Full Year
2014 2013
Acquisition and disposal related costs (97) (112)
Gain/(loss) on disposal of group companies(a) 1,392 733
Impairments and other one-off items(b) (335) (120)
Non-core items before tax 960 501
Tax impact of non-core items (423) (266)
Non-core items after tax 537 235
Attributable to:
Non-controlling interests - -
Shareholders’ equity 537 235
(a) 2014 includes gain of €1,316 million from the disposal of the Ragu and Bertolli brands and related assets (see note 7). (b) 2014 includes impairment charge of €305 million recognised on assets related to the Slim.Fast business.
The following table shows the impact of non-core items on profit attributable to shareholders.
€ million Full Year
2014 2013
Net profit attributable to shareholders’ equity 5,171 4,842
Post tax impact of non-core items (537) (235)
Core profit attributable to shareholders’ equity 4,634 4,607
13
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
3 SEGMENT INFORMATION - CATEGORIES
Fourth Quarter Personal
Care Foods
Refreshment
Home
Care Total
Turnover (€ million)
2013 4,520 3,472 1,696 2,118 11,806
2014 4,699 3,312 1,741 2,342 12,094
Change (%) 4.0 (4.6) 2.6 10.6 2.4
Impact of:
Exchange rates (%) 1.8 (0.1) 0.8 4.6 1.6
Acquisitions (%) - - 0.3 1.7 0.4
Disposals (%) (0.1) (3.8) (3.6) (0.1) (1.6)
Underlying sales growth (%) 2.1 (0.7) 5.3 4.0 2.1
Price (%) 3.1 1.0 2.1 3.9 2.5
Volume (%) (0.9) (1.7) 3.1 0.1 (0.4)
Full Year Personal
Care Foods
Refreshment
Home
Care Total
Turnover (€ million)
2013 18,056 13,426 9,369 8,946 49,797
2014 17,739 12,361 9,172 9,164 48,436
Change (%) (1.8) (7.9) (2.1) 2.4 (2.7)
Impact of:
Exchange rates (%) (5.0) (3.9) (4.6) (4.8) (4.6)
Acquisitions (%) - - 0.4 1.8 0.4
Disposals (%) (0.1) (3.6) (1.6) - (1.3)
Underlying sales growth (%) 3.5 (0.6) 3.8 5.8 2.9
Price (%) 2.3 0.6 1.8 3.4 1.9
Volume (%) 1.2 (1.1) 2.0 2.4 1.0
Operating profit (€ million)
2013 3,078 3,064 851 524 7,517
2014 3,259 3,607 538 576 7,980
Core operating profit (€ million)
2013 3,206 2,377 856 577 7,016
2014 3,325 2,305 811 579 7,020
Operating margin (%)
2013 17.0 22.8 9.1 5.9 15.1
2014 18.4 29.2 5.9 6.3 16.5
Core operating margin (%)
2013 17.8 17.7 9.1 6.4 14.1
2014 18.7 18.6 8.8 6.3 14.5
Turnover growth is made up of distinct individual growth components namely underlying sales, currency impact, acquisitions and
disposals. Turnover growth is arrived at by multiplying these individual components on a compounded basis as there is a currency
impact on each of the other components. Accordingly, turnover growth is more than just the sum of the individual components.
Core operating profit represents our measure of segment profit or loss as it is the primary measure used for the purpose of
making decisions about allocating resources and assessing performance of segments. Core operating margin is calculated as core
operating profit divided by turnover.
14
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
4 SEGMENT INFORMATION – GEOGRAPHICAL AREA
Fourth Quarter
Asia /
AMET /
RUB
The
Americas Europe Total
Turnover (€ million)
2013 4,671 3,934 3,201 11,806
2014 4,929 4,065 3,100 12,094
Change (%) 5.5 3.3 (3.2) 2.4
Impact of:
Exchange rates (%) 2.8 0.7 1.2 1.6
Acquisitions (%) 0.8 0.1 - 0.4
Disposals (%) (0.3) (3.5) (1.2) (1.6)
Underlying sales growth (%) 2.1 6.2 (3.1) 2.1
Price (%) 2.1 6.3 (1.6) 2.5
Volume (%) 0.1 (0.0) (1.5) (0.4)
Full Year
Asia /
AMET /
RUB
The
Americas Europe Total
Turnover (€ million)
2013 20,085 16,206 13,506 49,797
2014 19,703 15,514 13,219 48,436
Change (%) (1.9) (4.3) (2.1) (2.7)
Impact of:
Exchange rates (%) (6.4) (6.7) 0.8 (4.6)
Acquisitions (%) 0.9 - 0.1 0.4
Disposals (%) (0.5) (2.6) (0.9) (1.3)
Underlying sales growth (%) 4.3 5.4 (2.1) 2.9
Price (%) 2.3 4.7 (1.8) 1.9
Volume (%) 2.0 0.7 (0.2) 1.0
Operating profit (€ million)
2013 2,765 2,859 1,893 7,517
2014 2,626 3,233 2,121 7,980
Core operating profit (€ million)
2013 2,680 2,317 2,019 7,016
2014 2,611 2,274 2,135 7,020
Operating margin (%)
2013 13.8 17.6 14.0 15.1
2014 13.3 20.8 16.0 16.5
Core operating margin (%)
2013 13.3 14.3 14.9 14.1
2014 13.3 14.7 16.2 14.5
15
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
4 SEGMENT INFORMATION – GEOGRAPHICAL AREA (continued)
Additional geographical information
Fourth Quarter 2014 Fourth Quarter 2013
Turnover USG UVG UPG Turnover USG UVG UPG
€m % % % €m % % %
Unilever Total 12,094 2.1 (0.4) 2.5 11,806 4.1 2.7 1.4
Developed markets 5,036 (0.7) - (0.6) 5,069 (1.7) (0.8) (0.8)
Emerging markets 7,058 4.1 (0.6) 4.7 6,737 8.4 5.3 2.9
Full Year 2014 Full Year 2013
Turnover USG UVG UPG Turnover USG UVG UPG
€m % % % €m % % %
Unilever Total 48,436 2.9 1.0 1.9 49,797 4.3 2.5 1.8
Developed markets 20,807 (0.8) 0.5 (1.3) 21,540 (1.3) (0.5) (0.8)
Emerging markets 27,629 5.7 1.3 4.3 28,257 8.7 4.8 3.7
Fourth Quarter 2014 Fourth Quarter 2013
Turnover USG UVG UPG Turnover USG UVG UPG
€m % % % €m % % %
The Americas 4,065 6.2 - 6.3 3,934 5.2 2.0 3.2
North America 1,883 2.0 1.2 0.8 1,838 (2.4) (3.4) 0.9
Latin America 2,182 9.5 (0.9) 10.6 2,096 12.1 6.7 5.1
Full Year 2014 Full Year 2013
Turnover USG UVG UPG Turnover USG UVG UPG
€m % % % €m % % %
The Americas 15,514 5.4 0.7 4.7 16,206 4.6 1.0 3.5
North America 7,477 0.1 0.7 (0.6) 7,953 (1.5) (2.0) 0.5
Latin America 8,037 10.2 0.7 9.5 8,253 10.7 4.1 6.3
5 TAXATION
The effective tax rate for the year was 28.2% compared to 26.4% in 2013. The tax rate is calculated by dividing the tax charge by
pre-tax profit excluding the contribution of joint ventures and associates.
Tax effects of components of other comprehensive income were as follows:
€ million
Full Year 2014 Full Year 2013
Before
tax
Tax
(charge)/
credit
After
tax
Before
tax
Tax
(charge)/
credit
After
Tax
Fair value gains/(losses) on financial
instruments
(110)
25
(85)
121
(15)
106
Actuarial gains/(losses) on pension schemes (1,710) 460 (1,250) 942 (245) 697
Currency retranslation gains/(losses) (16) (9) (25) (980) (19) (999)
Other comprehensive income (1,836) 476 (1,360) 83 (279) (196)
16
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
6 COMBINED EARNINGS PER SHARE
The combined earnings per share calculations are based on the average number of share units representing the combined
ordinary shares of NV and PLC in issue during the period, less the average number of shares held as treasury stock.
In calculating diluted earnings per share and core earnings per share, a number of adjustments are made to the number of shares,
principally: (i) conversion into PLC ordinary shares in the year 2038 of shares in a group company (refer below) and (ii) the exercise
of share options by employees.
On 19 May 2014 Unilever PLC purchased the shares convertible to PLC ordinary shares in 2038. Due to the repurchase the average
number of combined share units is not adjusted for these shares from 20 May 2014 to 31 December 2014. The adjusted average
number of share units is calculated based on the number of days the shares were dilutive during the year ended 31 December
2014.
Earnings per share for total operations for the twelve months were calculated as follows:
2014 2013
Combined EPS – Basic
Net profit attributable to shareholders’ equity (€ million)
Average number of combined share units (millions of units)
Combined EPS – basic (€)
5,171 4,842
2,840.5 2,838.1
1.82 1.71
Combined EPS – Diluted
Net profit attributable to shareholders’ equity (€ million)
Adjusted average number of combined share units (millions of units)
Combined EPS – diluted (€)
5,171 4,842
2,882.6 2,924.0
1.79 1.66
Core EPS
Core profit attributable to shareholders’ equity (see note 2) (€ million)
Adjusted average number of combined share units (millions of units)
Core EPS – diluted (€)
4,634 4,607
2,882.6 2,924.0
1.61 1.58
In calculating core earnings per share, net profit attributable to shareholders’ equity is adjusted to eliminate the post tax impact of
business disposals, acquisition and disposal related costs, impairments, and other one-off items.
During the period the following movements in shares have taken place:
Millions
Number of shares at 31 December 2013 (net of treasury stock) 2,840.0
Net movements in shares under incentive schemes (3.2)
Number of shares at 31 December 2014 2,836.8
7 ACQUISITIONS AND DISPOSALS
On 7 March 2014 the Group acquired a 55% equity stake in the Qinyuan Group, a leading Chinese water purification business for an
undisclosed amount.
On 1 April 2014 the Group completed the sale of its meat snacks business, including the Bifi and Peperami brands, to Jack Link’s, for an
undisclosed amount.
On 30 June 2014 the Group completed the sale of its global Ragu and Bertolli pasta sauce business to Mizkan Group for a total cash
consideration of approximately US $2.15 billion.
On 2 December 2014 the Group announced that it has acquired the Talenti Gelato & Sorbetto business for an undisclosed amount.
On 22 December 2014 the Group announced the purchase of the Camay brand globally and the Zest brand outside of North America and
the Caribbean from The Procter & Gamble Company. The transaction, for an undisclosed amount, is expected to close during the first
half of 2015 subject to necessary regulatory approvals.
17
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
8 FINANCIAL INSTRUMENTS
The Group is exposed to the risks of changes in fair value of its financial assets and liabilities. The following table summarises the
fair values and carrying amounts of financial instruments and the fair value calculations by category.
€ million
Fair value Carrying amount
As at 31
December
2014
As at 31
December
2013
As at 31
December
2014
As at 31
December
2013
Financial assets
Cash and cash equivalents 2,151 2,285 2,151 2,285
Held-to-maturity investments 89 75 89 75
Loans and receivables 208 104 208 104
Available-for-sale financial assets 670 760 670 760
Financial assets at fair value through profit and loss:
Derivatives 296 294 296 294
Other 122 32 122 32
3,536 3,550 3,536 3,550
Financial liabilities
Preference shares (108) (114) (68) (68)
Bank loans and overdrafts (1,119) (1,067) (1,114) (1,067)
Bonds and other loans (11,417) (10,162) (10,573) (9,594)
Finance lease creditors (224) (217) (199) (204)
Derivatives (350) (299) (350) (299)
Other financial liabilities (418) (269) (418) (269)
(13,636) (12,128) (12,722) (11,501)
€ million Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
As at 31 December 2014 As at 31 December 2013
Assets at fair value
Other cash equivalents - 221 - - 91 -
Available-for-sale financial assets 14 158 498 8 276 476
Financial assets at fair value through profit or loss:
Derivatives(a) - 417 - - 376 -
Other 119 - 3 25 - 7
Liabilities at fair value
Derivatives(b) - (514) - - (395) -
(a) Includes €121 million (2013: €82 million) derivatives, reported within trade receivables, that hedge trading activities. (b) Includes €(164) million (2013: €(96) million) derivatives, reported within trade creditors, that hedge trading activities.
There were no significant changes in classification of fair value of financial assets and financial liabilities since 31 December 2013.
There were also no significant movements between the fair value hierarchy classifications since 31 December 2013.
The fair value of trade receivables and payables is considered to be equal to the carrying amount of these items due to their short-
term nature.
Calculation of fair values
The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used
to estimate the fair values are consistent with those used in the year ended 31 December 2013.
18
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
9 DIVIDENDS
The Boards have declared a quarterly interim dividend for Q4 2014 at the following rates which are equivalent in value at the rate of
exchange applied under the terms of the Equalisation Agreement between the two companies:
Per Unilever N.V. ordinary share: € 0.2850
Per Unilever PLC ordinary share: £ 0.2177
Per Unilever N.V. New York share: US$ 0.3303
Per Unilever PLC American Depositary Receipt: US$ 0.3303
The quarterly interim dividends have been determined in euros and converted into equivalent sterling and US dollar amounts using
exchange rates issued by the European Central Bank on 16 January 2015.
The quarterly dividend calendar for the remainder of 2015 will be as follows:
Announcement
Date
NV NY & PLC ADR
Ex-Dividend Date
NV & PLC
Ex-Dividend Date Record Date Payment Date
Quarterly dividend –
for Q4 2014 20 January 2015 4 February 2015 5 February 2015 6 February 2015 11 March 2015
Quarterly dividend –
for Q1 2015 16 April 2015 22 April 2015 23 April 2015 24 April 2015 3 June 2015
Quarterly dividend –
for Q2 2015 23 July 2015 5 August 2015 6 August 2015 7 August 2015 9 September 2015
Quarterly dividend –
for Q3 2015 15 October 2015 28 October 2015 29 October 2015 30 October 2015 9 December 2015
US dollar cheques for the quarterly interim dividend will be mailed on 11 March 2015 to holders of record at the close of business
on 6 February 2015. In the case of the NV New York shares, Netherlands withholding tax will be deducted.
10 PURCHASE OF ESTATE SHARES CONVERTIBLE TO UNILEVER SHARES IN 2038
The first Viscount Leverhulme was the founder of the company which became Unilever PLC. When he died in 1925, he left in his will
a large number of Unilever PLC shares in various trusts. When the will trusts were varied in 1983, the interests of the beneficiaries
of his will were also preserved. Four classes of special shares were created in Margarine Union (1930) Limited, a subsidiary of
Unilever PLC. One of these classes of shares (‘Estate shares’) has rights that enable it to be converted at the end of the year 2038
to 70,875,000 Unilever PLC ordinary shares. Before this date these shares have no rights to dividends nor do they allow early
conversion. There are 20,000 Estate shares with a nominal value of £0.01 each.
On 19 May 2014 Unilever PLC purchased all of the Estate shares for a cash consideration of £715 million. The resulting loss of €880
million, being the difference between the nominal value and amount paid, has been recorded in retained profit.
11 EVENTS AFTER THE BALANCE SHEET DATE
There were no material post balance sheet events other than those mentioned elsewhere in this report.